DECENTRALIZED crypto currency (including Bitcoin) is a delusion (any solutions?)

[dinofelis]

Currently it seem bitcoin is stuck in this situation where no good decision can be made because the way that power on the network works with pow doesnt encourage this.

That's called immutability.

[IadixDev]

Well, my idea is that if 99% of humanity could drop dead by tomorrow, except my friends and family, and those that do useful things for me, that would be a positive thing for me, because the 70 million people remaining would have much more resources at their disposal than the 7 billion idiots running around on this earth.

Life on earth would be a dream again, with 70 million of us.

This is entierely false. Level of life and energy available /  head grow exponentially with global population growth, steady. Place with high density of population always have more manufactured ressource at there disposal.

If you are better on your own without anyone else,  you dont need currency or economy.

[IadixDev]

Consciousness of consequences of bad and good action on other is necessary to have any viable society/economy.

The argument with pleasure seeking can be that there is no higher pleasure that seeing someone else perfecting himself

That is empathy, which is a phenomenon like "liking chocolate milk, and feeling pain when you hit my toe with a hammer".  Empathy is just a positive (or negative!) correlation coefficient between your own happiness and suffering, and the image you have of a specific other being being happy or suffering.  If the coefficient is positive, it is called love and friendship ; if the coefficient is negative, it is called hate and jealousy.  Point is, empathy usually only matters for a FEW others (family, friends, and a few hated enemies).  

In as much as pleasing friends is done to augment your own happiness, that's still nothing else but selfish behaviour !  You use the other one to increase your own good.  In as much as torturing an enemy (even if you have to sacrifice things for that) provides you with pleasure, this is the same: you use the enemy to provide you with pleasure, and is of exactly the same selfish nature than making sacrifice and pleasing a lover or a friend to get the "empathy reward".

Well it's where the concept of selfness can become confusing with empathy. With the simple definition, people who act with empathy are not selfish.

I dont think torturing people, even "enmies" really bring much pleasure to anyone. Only need to see what remain of vets after few years like this. They dont look very happy.

Haaaa the great pleasure to torture your enmy in the name of freedom



Sight  

[iamnotback]

ladixDev, this is for you. I hope you understand how we will win. Let's get busy coding and stop bloviating.  Make sure you deeply understand everything I have written in that thread for the past 2 days.

Understand everything about money and why OpenShare will win.

And so now I have finally butted heads with the richest whale in Bitcoin.

ladixDev, your heart wants a meritocracy. So let's go make one. Being angry or upset is not a plan. We have a plan.

Understand how everything is changing because we are leaving the fixed capital industrial age. You are still fighting the last war. Let's go fight the current war and we have the power. Coding is power. Use your power now to create meritocracy.

In as much as pleasing friends is done to augment your own happiness, that's still nothing else but selfish behaviour !

And it is not incongruent with unselfish behavior when we remove the Prisoner's dilemma of fungible money, which I think is roughly what Nash was trying to say.

[hv_]

ladixDev, this is for you. I hope you understand how we will win. Let's get busy coding and stop bloviating.  Make sure you deeply understand everything I have written in that thread for the past 2 days.

Understand everything about money and why OpenShare will win.

And so now I have finally butted heads with the richest whale in Bitcoin.

ladixDev, your heart wants a meritocracy. So let's go make one. Being angry or upset is not a plan. We have a plan.

Understand how everything is changing because we are leaving the fixed capital industrial age. You are still fighting the last war. Let's go fight the current war and we have the power. Coding is power. Use your power now to create meritocracy.

In as much as pleasing friends is done to augment your own happiness, that's still nothing else but selfish behaviour !

And it is not incongruent with unselfish behavior when we remove the Prisoner's dilemma of fungible money, which I think is roughly what Nash was trying to say.

Great post! Back to health?
 

[iamnotback]

On the issues with and ramifications of centralization:

Of course, the smaller the number of votees needed to do this, the higher the probability of de facto centralization.

Disagree. Because the cost of voting is not free, i.e. democracy is centralized. Actually a small number of highly knowledgeable whales who have conflicting priorities (such that a stalemate is attained, which appears to be the case now with Bitcoin as you had previously posited) is more decentralized because these whales are not manipulable into voting as a colluding bloc, except perhaps to defend the status quo. And this is precisely the conceptual reason why Bitcoin may still be decentralized. But the danger is that over time the paradigm is a winner-take-all due to either the marginal utility of economies-of-scale (within the Bitcoin protocol) being perfectly constant and/or the inability of the Bitcoin small block, non-shrinking (money supply, i.e. not a deflationary supply) system to adapt to the knowledge age as finance becomes inexorably less efficacious w.r.t. to knowledge value (i.e. the NWO will be able to bring those whales into submission to the higher authority of an externality). I would much prefer if possible a protocol wherein the power of everyone is essentially nil. I think I may have such a design, but I am highly skeptical as I should be.

By the way... our pools are NOT reward sharing as you seem to think.  All they do is vote according to a users preference so that a user may remain offline if he/she chooses to use a pool.  Individuals still retain control of 100% of their funds.

I am operating at a higher level of meta economics wherein your "preferences" differentiation is afaics irrelevant. The users who don't align their preferences with the majority will lose rewards, because the majority can censor every block of the minority. Now go back to the point that voting (i.e. "preferences") is not cost-free and thus is manipulable.

Delegating preferences means users can't be bothered, i.e. the cost of voting is not free. Thus they will not be expert. They will not be able to organize because they can be divided and conquered and many different pet "preferences" (analogous examples from current democracies include e.g. gay rights, abortion, etc). They can even be incited via propaganda to diffuse their efforts into a multitude of preferences.

This is why @dinofelis is correct when he states instead the rules must be hard-coded immutably into the protocol.

Real world example of how non-ideal money (i.e. money that can be manipulated) distorts markets:

https://www.armstrongeconomics.com/international-news/europes-current-economy/the-euro-crisis-the-previous-debt/

https://www.armstrongeconomics.com/international-news/greece/greek-govt-is-40-of-gdp/

@hv_ improved and improving (10 weeks of TB treatment completed, 14 more weeks to go), but struggling to work effectively more than about 6 - 8 hours a day, even though I am working beyond the point every day where the delirium kicks on.

[iamnotback]

The threat to Bitcoin's model of mutual self-destruction enforced decentralization w.r.t. to the immutability of the protocol:

And this is precisely the conceptual reason why Bitcoin may still be decentralized. But the danger is that over time the paradigm is a winner-take-all due to either the marginal utility of economies-of-scale (within the Bitcoin protocol) being perfectly constant and/or the inability of the Bitcoin small block, non-shrinking (money supply, i.e. not a deflationary supply) system to adapt to the knowledge age as finance becomes inexorably less efficacious w.r.t. to knowledge value (i.e. the NWO will be able to bring those whales into submission to the higher authority of an externality). I would much prefer if possible a protocol wherein the power of everyone is essentially nil...

So Bitcoin maintains its immutability because the richest whales in the kingdom dominate it and they will experience mutual self-destruction if they defect, where 'defect' means to try to mutate the protocol. The economics and cooperative game theory was explained upthread, e.g. my summary rebuttal to @jbreher.

One hypothetical threat to Bitcoin's immutability is where another altcoin would gain a higher marketcap, due to the analogous arbitrage master/slave vulnerability quoted below. But this won't happen with Litecoin gaining more adoption with SegWit (presuming @dinofelis and I are correct that Bitcoin will never have SegWit and LN), because Lightning Networks is centralized hubs meaning private fractional reserve banking, which thus means all the profit from it will be ultimately settled between those power brokers on the Bitcoin blockchain. The transaction settling of LIghtning Network channels on the Litecoin blockchain is for transactional settlement not for power broker settlement. The tail doesn't wag the dog. And thus Litecoin will never be more valuable than Bitcoin, for the analogous reason that Nash explained why silver can't be as valuable as gold (c.f. my upthread rebuttal of @r0ach for the relevant Nash quotes). Litecoin might rise to 1/10 of Bitcoin's market cap, similar to silver's ratio to gold when silver was used as a wide-spread currency.

PoW is only immutable on the master blockchain. The lesser altcoins can be manipulated by arbitrage employing the fulcrum of the master Bitcoin. Litecoin appears to ready to lose its immutability and adopt SegWit because the miners and whales (who are the same in both BTC and LTC btw) are able to take advantage of the ability to dominate a lesser market cap with a greater one. This creates a game theory opportunity where the previously manipulation of LTC to force it to be undervalued will now be reversed so that there will be scarcity of mining supply thus motivating miners to vote for activating SegWit to maintain the ramp up in the price.

Thus any threat to Bitcoin only comes from an altcoin that gains massive adoption in a value activity that is not susceptible to fungible finance (because otherwise the profit of the activity will be siphoned off to the finance power brokers and settled on the Bitcoin blockchain). If such an altcoin attained a larger marketcap than Bitcoin, then Bitcoin would be the tail that can't wag the dog and so then the power broker Nash equilibrium of Bitcoin can fail. As I stated upthread, the collapse of the efficacy of finance will not happen overnight. Thus Bitcoin's immutability is not in danger near-term.

I presented upthread already my thesis on the knowledge age, value of knowledge, and the inexorable decline of the efficacy of finance w.r.t. to knowledge value.

In short, fungible money is a winner-take-all paradigm because of the power vacuum.

But if the money is non-fungible knowledge, then nobody is in control of the paradigm (which is the asymptotic result Nash was searching for). I have a surprise coming.

The tail doesn't wag the dog. If knowledge value is traded directly in an Inverse Commons, finance is the tail.

[dinofelis]

Well, my idea is that if 99% of humanity could drop dead by tomorrow, except my friends and family, and those that do useful things for me, that would be a positive thing for me, because the 70 million people remaining would have much more resources at their disposal than the 7 billion idiots running around on this earth.

Life on earth would be a dream again, with 70 million of us.

This is entierely false. Level of life and energy available /  head grow exponentially with global population growth, steady. Place with high density of population always have more manufactured ressource at there disposal.

That is first of all only true as long as economic activity is not resource limited ; and secondly, this is mostly also the case because the concentrated areas (the city) are applying extortion on the less dense areas (the countryside), that is, there is a structural flux of wealth from less dense areas to provide dense areas with the stolen wealth ; mainly because the top layers of hierarchy are in the denser areas.

On the other hand, you are right, that structural investments are much more efficient in *sufficiently* dense areas (a road is optimally efficient for a given traffic ; too much traffic jams it, but too low a traffic makes it too expensive per amount of traffic), and costs that scale with distance are also lower in denser areas.

However, I wasn't talking about "putting a human every 20 km" or something like that.  You can very well have a few cities with 70 million people. But now we have very, very high environmental costs that orient a huge amount of our production value into being energy efficient, low-polution etc...  In fact, we can't sustain that, which is why we have to have most of our industrial production in India and China where the environmental costs are still lower.  This is a cost that is entirely gone when we divide humanity by 100.  We can drive cars that consume 50 l / 100 km, without a problem, and we have petrol for the coming 500 years or more.  We don't have to get nervous about climate change.  We can have large forests and still have all the (mechanised) agriculture we'd like.

Our economy is being hurt by resource limits since about 20-30 years and it won't improve.   South America and Africa are being urbanized at the cost of huge parts of nature, in a totally non-sustainable way.  Until not so long ago, labour was a resource and the more people there were, the more labour offer there was ; it is fading away. 

We are now hitting a resource limitation which is strangling us in the same way bitcoin's 1MB block size is strangling it.  This has never happened before, because when it happened in western countries, we could colonize, and afterwards, we could delocalize industrial production.  We can't any more. 

This is normal.  Every population is limited by resources if it grows.  We could push limits some time.  We still can a bit.

[sidhujag]

Well, my idea is that if 99% of humanity could drop dead by tomorrow, except my friends and family, and those that do useful things for me, that would be a positive thing for me, because the 70 million people remaining would have much more resources at their disposal than the 7 billion idiots running around on this earth.

Life on earth would be a dream again, with 70 million of us.

This is entierely false. Level of life and energy available /  head grow exponentially with global population growth, steady. Place with high density of population always have more manufactured ressource at there disposal.

That is first of all only true as long as economic activity is not resource limited ; and secondly, this is mostly also the case because the concentrated areas (the city) are applying extortion on the less dense areas (the countryside), that is, there is a structural flux of wealth from less dense areas to provide dense areas with the stolen wealth ; mainly because the top layers of hierarchy are in the denser areas.

On the other hand, you are right, that structural investments are much more efficient in *sufficiently* dense areas (a road is optimally efficient for a given traffic ; too much traffic jams it, but too low a traffic makes it too expensive per amount of traffic), and costs that scale with distance are also lower in denser areas.

However, I wasn't talking about "putting a human every 20 km" or something like that.  You can very well have a few cities with 70 million people. But now we have very, very high environmental costs that orient a huge amount of our production value into being energy efficient, low-polution etc...  In fact, we can't sustain that, which is why we have to have most of our industrial production in India and China where the environmental costs are still lower.  This is a cost that is entirely gone when we divide humanity by 100.  We can drive cars that consume 50 l / 100 km, without a problem, and we have petrol for the coming 500 years or more.  We don't have to get nervous about climate change.  We can have large forests and still have all the (mechanised) agriculture we'd like.

Our economy is being hurt by resource limits since about 20-30 years and it won't improve.   South America and Africa are being urbanized at the cost of huge parts of nature, in a totally non-sustainable way.  Until not so long ago, labour was a resource and the more people there were, the more labour offer there was ; it is fading away. 

We are now hitting a resource limitation which is strangling us in the same way bitcoin's 1MB block size is strangling it.  This has never happened before, because when it happened in western countries, we could colonize, and afterwards, we could delocalize industrial production.  We can't any more. 

This is normal.  Every population is limited by resources if it grows.  We could push limits some time.  We still can a bit.

In organism mechanisms such as the global marketplace/companies/even urban city centers generally there is a recession when resource limits are reached, the recession may turn to depression if those limits are not resolved with adequate consensus among participants, generally that mechanism either thrives or dies, thrives if there is a technological breakthrough or dies if they can't figure it out in time.

We generally do our best work when backs are against the walls, so now that it is.. we shall see the next test for bitcoin.

[iamnotback]

@dinofelis, I realized that no PoW blockchain can have a viable changeable blockchain size solution. Every possible solution is centralization (large blocks, small blocks, unlimited blocks), including Monero's automatic adjustment algorithm.

Even LN on Litecoin will eventually fail as a political clusterfuck when the block size needs to be increased again.

Satoshi's PoW only is really viable only for power broker money on small blocks.

Satoshi's PoW is diabolical. We must destroy it.

[iamnotback]

Well, my idea is that if 99% of humanity could drop dead by tomorrow, except my friends and family, and those that do useful things for me, that would be a positive thing for me, because the 70 million people remaining would have much more resources at their disposal than the 7 billion idiots running around on this earth.

Life on earth would be a dream again, with 70 million of us.

This is entierely false. Level of life and energy available /  head grow exponentially with global population growth, steady. Place with high density of population always have more manufactured ressource at there disposal.

If you are better on your own without anyone else,  you dont need currency or economy.

@dinofelis hates mankind. The banksters have eaten his soul. He loves robots more than humans. Very sad and entirely incorrect conceptualization. You are correct @iadix.

South America and Africa are being urbanized at the cost of huge parts of nature, in a totally non-sustainable way.

As if the banksters' debt based, overly leveraged fungible finance driven corruption is a reflection of humankind.

[armored]

I think we still do not have the perfect money, and maybe after decades we still have not achieved such a thing. But what matters to me is that what we have at the moment is much better than fiat currencies, and it's good to know that there are people working to make these technologies better and better.

[sidhujag]

I think we still do not have the perfect money, and maybe after decades we still have not achieved such a thing. But what matters to me is that what we have at the moment is much better than fiat currencies, and it's good to know that there are people working to make these technologies better and better.

Noone said we have perfect money.. that is impossible

[IadixDev]

Well, my idea is that if 99% of humanity could drop dead by tomorrow, except my friends and family, and those that do useful things for me, that would be a positive thing for me, because the 70 million people remaining would have much more resources at their disposal than the 7 billion idiots running around on this earth.

Life on earth would be a dream again, with 70 million of us.

This is entierely false. Level of life and energy available /  head grow exponentially with global population growth, steady. Place with high density of population always have more manufactured ressource at there disposal.

That is first of all only true as long as economic activity is not resource limited ; and secondly, this is mostly also the case because the concentrated areas (the city) are applying extortion on the less dense areas (the countryside), that is, there is a structural flux of wealth from less dense areas to provide dense areas with the stolen wealth ; mainly because the top layers of hierarchy are in the denser areas.

On the other hand, you are right, that structural investments are much more efficient in *sufficiently* dense areas (a road is optimally efficient for a given traffic ; too much traffic jams it, but too low a traffic makes it too expensive per amount of traffic), and costs that scale with distance are also lower in denser areas.

However, I wasn't talking about "putting a human every 20 km" or something like that.  You can very well have a few cities with 70 million people. But now we have very, very high environmental costs that orient a huge amount of our production value into being energy efficient, low-polution etc...  In fact, we can't sustain that, which is why we have to have most of our industrial production in India and China where the environmental costs are still lower.  This is a cost that is entirely gone when we divide humanity by 100.  We can drive cars that consume 50 l / 100 km, without a problem, and we have petrol for the coming 500 years or more.  We don't have to get nervous about climate change.  We can have large forests and still have all the (mechanised) agriculture we'd like.

Our economy is being hurt by resource limits since about 20-30 years and it won't improve.   South America and Africa are being urbanized at the cost of huge parts of nature, in a totally non-sustainable way.  Until not so long ago, labour was a resource and the more people there were, the more labour offer there was ; it is fading away.  

We are now hitting a resource limitation which is strangling us in the same way bitcoin's 1MB block size is strangling it.  This has never happened before, because when it happened in western countries, we could colonize, and afterwards, we could delocalize industrial production.  We can't any more.  

This is normal.  Every population is limited by resources if it grows.  We could push limits some time.  We still can a bit.

Well it's well known fact last century economy switched from primary sector (resources based) to tertiary sector  ( service based), and maybe as iamnotback says, switching to knowledge based, in which case it's hard to say that more human is not equivalent to more knowledge potential, and so more wealth.

Most of the things you buy are services or manufactured product, the economy is more there than into Apple or iron or Woods.

Humans can always adapt to new situation, and find way to increase ressources production, and lower cost, increase efficiency, transport etc, more the way to go

Actually amartya sen studied many cases of famines around the world, it's rarely due to food shortage. All the time the problem is access the resources more than producing them, and it's related to free market thinking when some economic sector collapse or social problems, and some people are prevented access to the ressources. It's how free market become oppression in reality. The problem is rarely production capacity.

Supermarket are full, gas pump are full, not really the main pb.

The 1mb is strangling it, but also the same reason also make it more alive. And sign of growth. But it need to adapt to increase efficiency to fit the current level of energetic cost . But humans are able to do this

[iamnotback]

Who else is tired of this shit?

[CoinHoarder]

@Anonymint

Care to comment on this? I'm not sure if you can without releasing proprietary information...

https://bitcointalk.org/index.php?topic=1858954.0

[iamnotback]

From my deep study of the range of plausible designs for a blockchain consensus system (and I studied much deeper than in than what is contained in that linked thread), I conclude that it is impossible to have a fungible token on a blockchain in which the consensus doesn't become centralized iff the presumption is that the users of the system gain the most value from the system due to its monetary function.

However, I was able to outsmart the global elite, because I realized that if the users of the system gained more value from the system for its non-monetary function and iff that value can't be financed (i.e. its value can be leeched off by control of fungible money), and if I provided a way for the users to provide the Byzantine fault DETECTION as a check-and-balance against the power of the whales and if I provided this in a way that is not democracy and is a crab bucket mentality Nash equilibrium, then I would have defeated the problems with the concept of fungible money.

The elite simply weren't aware of these concepts, because I invented them. Nash didn't know this.

And that is what I intend to launch with BitNet.

Quoting, because this post is too valuable  

More on that...

You could just remove the reward, any one can mine new block out of the mem pool, if two blocks or tx are in common, a determinstic algorithm could be used to select between the two.

I agree with you.  The error in most crypto is the reward, which gives rise to strategies that do not necessarily induce the desired properties.  I also think that the only viable kind of crypto currency is where the validation/consensus decision is taken on a voluntary basis, the "reward" being that the system in which you are invested, keeps running correctly.

However, you still need a kind of deterministic decision *that is hard to game* (because you can do "proof of work" like calculations to get the deterministic solution in your advantage).  This is why a kind of PoS signature scheme is necessary in my opinion.

@dinofelis, how many times do I have to repeat to you that voting is not free.

Ethereum's Casper shit is more of the same proof-of-stake (nothing-at-stake or centralization by economic weight, e.g. DPoS) nonsense. The betting stuff enables what Vitalik refers to as "dark uncles" or "dunkles", which Vitalik incorrectly thinks will solve the nothing-at-stake problem. Also Casper has the problem that all deterministic finality PoS and Byzatine agreement systems have, which is a 33% liveness threshold which if that many validators balk or stop processing, then the chain can't move forward without a hard fork.

The only way to replace PoW is with an Inverse Commons consensus protocol, which is my new invention.

And all together your comment also show that you dont see my perpective, and why the thing you point doesnt matter, and what I meant with checkpoint is that you would only need real pow consencus on this checkpoint to "harden" The chain if you want to enforce a particular order on the tx/block, but that would just be about one packet saying this block height is this block hash, and having a pow once in a while on this checkpoint instead of every block.

I invented that already in collaboration with @jl777 for Komodo in 2016. It is named dPoW (delayed proof-of-work).

CounterParty does something somewhat analogous as well.

And really it isn't a secure and sound solution, but more of a gimick. Because the local consensus still have to decide what to submit for checkpoints because the PoW system isn't validating every thing and can't resolve conflicting double-spending orderings that occurred between checkpoints.

[IadixDev]

From my deep study of the range of plausible designs for a blockchain consensus system (and I studied much deeper than in than what is contained in that linked thread), I conclude that it is impossible to have a fungible token on a blockchain in which the consensus doesn't become centralized iff the presumption is that the users of the system gain the most value from the system due to its monetary function.

However, I was able to outsmart the global elite, because I realized that if the users of the system gained more value from the system for its non-monetary function and iff that value can't be financed (i.e. its value can be leeched off by control of fungible money), and if I provided a way for the users to provide the Byzantine fault DETECTION as a check-and-balance against the power of the whales and if I provided this in a way that is not democracy and is a crab bucket mentality Nash equilibrium, then I would have defeated the problems with the concept of fungible money.

The elite simply weren't aware of these concepts, because I invented them. Nash didn't know this.

And that is what I intend to launch with BitNet.

Quoting, because this post is too valuable  

More on that...

You could just remove the reward, any one can mine new block out of the mem pool, if two blocks or tx are in common, a determinstic algorithm could be used to select between the two.

I agree with you.  The error in most crypto is the reward, which gives rise to strategies that do not necessarily induce the desired properties.  I also think that the only viable kind of crypto currency is where the validation/consensus decision is taken on a voluntary basis, the "reward" being that the system in which you are invested, keeps running correctly.

However, you still need a kind of deterministic decision *that is hard to game* (because you can do "proof of work" like calculations to get the deterministic solution in your advantage).  This is why a kind of PoS signature scheme is necessary in my opinion.

@dinofelis, how many times do I have to repeat to you that voting is not free.

Ethereum's Casper shit is more of the same proof-of-stake (nothing-at-stake or centralization by economic weight, e.g. DPoS) nonsense. The betting stuff enables what Vitalik refers to as "dark uncles" or "dunkles", which Vitalik incorrectly thinks will solve the nothing-at-stake problem. Also Casper has the problem that all deterministic finality PoS and Byzatine agreement systems have, which is a 33% liveness threshold which if that many validators balk or stop processing, then the chain can't move forward without a hard fork.

The only way to replace PoW is with an Inverse Commons consensus protocol, which is my new invention.

And all together your comment also show that you dont see my perpective, and why the thing you point doesnt matter, and what I meant with checkpoint is that you would only need real pow consencus on this checkpoint to "harden" The chain if you want to enforce a particular order on the tx/block, but that would just be about one packet saying this block height is this block hash, and having a pow once in a while on this checkpoint instead of every block.

I invented that already in collaboration with @jl777 for Komodo in 2016. It is named dPoW (delayed proof-of-work).

CounterParty does something somewhat analogous as well.

And really it isn't a secure and sound solution, but more of a gimick. Because the local consensus still have to decide what to submit for checkpoints because the PoW system isn't validating every thing and can't resolve conflicting double-spending orderings that occurred between checkpoints.

Yes they still have to check validity in between, the checkpoint is just to rule  out the 0.01% proba that could happen with collision or when nodes could think they are on the same chain but are not because of a weird low probability thing, it's just to push this probability few zero down.

But the core of the idea is not dPoW or only this, this is just additional measure to push probability of erroneous consensus few zero down

I still think you miss the gist of the idea lol

[alkan]

In a recent article I proposed a dual-token approach to blockchain consensus. The system aims to provide economic decentralization, fulfilling the paradigm: One entity, one vote! The model stands in a stark contrast to existing blockchains like Bitcoin, Ethereum or NXT in which the influence of a party is proportional (or even superlinear) to its resources or stake. My proposal can be broken down into the following key points:

- The blockchain makes use of two different tokens: minter accounts and currency units (coins)
- Blocks can only be built by minter accounts
- The creation rate of minter accounts is limited: With every block, only a predefined number of new minters accounts are created.
- Minter accounts can be sold once upon creation, while further sales are strongly discouraged as the seller will still know the private key (and could steal the funds back any time).
- No economic incentive to own multiple accounts

In my second post I relax some of the assumptions made in my seminal article and further explore the design space around Proof of Membership blockchains. The name “Proof of Membership” is chosen to express that every member of the system can contribute to the blockchain, while a member’s impact on the consensus is not based on stake nor on hash rate. Even though it is impossible to physically restrict the number of accounts held by a member, we can make it economically pointless to possess more than one (or maybe a few) account.

You can find my article here: https://hackernoon.com/proof-of-membership-for-blockchains-1534a3f9faba

Please let me know what you think!

[Pilchard]

I just stumbled upon Solidus, a proposed Cryptocurrency based on permissionless Byzantine Consensus:

In summary, this work presents Solidus, a scalable and incentive compatible cryptocurrency based on a fault-tolerant committee and permissionless Byzantine consensus. It is secure against withholding attacks such as selfish mining and provides instantaneous confirmation of transactions. Perhaps a limitation of Solidus is that the protocol is currently rather complex. It remains interesting future work to simplify and improve the Solidus protocol.

Solidus uses PoW for leader election to adapt the Practical Byzantine Fault Tolerance (PBFT) protocol to a permissionless setting. It comes with a whole set of incentive
mechanisms for different kinds of actions. As far as I can tell, it's far more sophisticated than BitcoinNG and ByzCoin and (promises) offers quite some advantages over them. However, it still relies on the assumption that at least 2/3 of the computing power is controlled by honest nodes.

The PBFT protocol is notoriously complicated!  There is a derivative called RAFT that is simpler and easier to develop, but there is still a lot of complexity involved.

It's a novel idea though, one that I myself briefly researched quite some time ago, but I decided to steer clear of modifying traditional Byzantine consensus algorithms with POW/POS et all for a number of reasons.

Traditional byzantine consensus algorithms are designed to be used in private/permissioned systems (which is why a lot of companies touting private blockchains are using them as their consensus foundation).  

They make an implicit assumption that the majority of actors in the system are permissioned, and that faults will most likely be hardware failures, connection issues and such....not actors that defect maliciously.

From their inception that assumption has held largely true and they have performed very well at enabling fault tolerant synchronization of data-centers and the like across the globe for many years, with almost all of the big centralized players using some variation of PBFT/RAFT to do so.  

Permissionless however is a different beast altogether.   Using POW as the function to determine leadership is a nice idea, and it does mitigate Sybil to a large degree...but...that still leaves a rather large problem...DDOS.

I skimmed the paper that you mentioned and I could find no mechanism detailed to prevent DDoS (perhaps I missed it?  I plan to read in more detail tomorrow as its 4AM now).  It mentions at the end of the paper that DDoS is harder to perform due to the committee, but the presence of the committee, while it might help to prevent complete stalls, doesn't appear to reduce disruption possibilities IMO.  For the record the ease of DDoS, and the difficulty in guarding against them was the main issue that caused me to swiftly abandon my own research.

The issue lies in the fact that with a permissionless leader based Byzantine algorithm, it is trivial to discover who you need to DDoS to disrupt the network as you are internal to the network itself!

The "timeouts" of PBFT are required so that a node can monitor the current leader and signal when it thinks an election process is required.  It also means you know who to attack so that an election signal is broadcast from the network majority, the processes is triggered, and once complete, you now know your new target.

Repeating that process can deadlock the network in a never ending cycle of elections where no transactions get processed (or processed very slowly).

This DDoS technique is more difficult in a permissioned environment as you are unable to determine who is the leader of that network unless you have managed to obtain permission.  Even then, safe-guards can be implemented that can detect DDoS attacks much easier and ban or remove that node from the network topology and revoke connection permissions.  

With permissionless thats not possible, obviously, as the attacker just spins up another node and re-connects and is immediately able to discover who to attack.

Cypherium appears to be using POW+BFT,  they say they have a solution to the DDOS issue.  Here's what they said...

"" I’ve discussed with Emin regarding DDoS issue. He suggested we use Bitcoin’s method, which limits the number of connections by IP prefix. Also, a local PoW can be carried with the message to deter DDoS. I’ll check with our engineer. ""

Does it hold up however?